What is a Letter of Claim and how to respond

What is a Letter of Claim?

A Letter of Claim, also known as a Letter Before Action, is the Claimant’s first opportunity to demonstrate the basis of their claim. The Civil Procedure Rules 1988 (“CPR”) outline the steps parties should take before commencing Court proceedings. The CPR states that the objective of pre-action conduct and the protocol is to:

1. Understand each other’s position;
2. Make decisions about how to proceed;
3. Try to settle the issues without proceedings;
4. Consider a form of Alternative Dispute Resolution to assist with settlement;
5. Support the efficient management of those proceedings; and
6. Reduce the costs of resolving the dispute.

Some types of disputes, such as debt claims, construction disputes and landlord/tenant claims, must comply with the pre-action protocol. Where the pre-action protocol does not apply to the dispute, pre-action conduct is still advised.

What should be included in a Letter of Claim?

• Summary of the main facts – there should be clear statements of the circumstances giving rise to the claim
• The legal basis of the claim – explanation of how the law supports the Claimant’s position
• Evidence – copies of any documents relevant to the claim
• Loss being claimed – a breakdown of what the Claimant is seeking from the Defendant, such as damages or corrective action
• A time limit for a response – the Defendant should be given a reasonable period to provide a full written response. This is normally between 14 and 28 days.

How to respond

The Defendant must ensure they respond to a Letter of Claim within the timeframe stated. If they are unable to respond in the timeframe, they should inform the other party that they need more time to respond.

The letter in response should include confirmation as to whether the claim is accepted and, if it is not acceptable, the reasons why, together with an explanation as to which facts and parts of the claim are disputed. The letter should also include whether the Defendant is making a counterclaim.

If the Defendant fails to respond to the letter of claim, the next step for the Claimant would be to commence Court proceedings.

Whether acting for the Defendant or the Claimant, we regularly advise on the prospects of claims in the initial stages and whether a claim can be successfully commenced or defended in Court. It is our objective to help prevent our client’s incurring the cost of Court proceedings and to attempt to settle the matter in pre-action correspondence

 

 

Janeet Jawanda

Solicitor